Question

If 30 million gallons of milk are being produced, then we know Multiple Choice marginal benefit is greater than marginal cost. too little milk is being produced. too much milk is being produced. marginal benefit is $1.00.

Answer 1

If 30 million gallons of milk are being produced, then we know too much milk is being produced.

How can the curve be interpreted?

When the two curves intersect, it means that there is an equilibrium in the market. There is neither a surplus or a scarcity. In the graph, the equilibrium quantity is 28.

When output is greater than equilibrium quantity, there is a surplus. This means that there is too much milk been produced. This would lead to a fall in the price of milk.  When output is less than equilibrium quantity, there would be a scarcity. This would drive prices up.

Please find attached the graph used to answer this question. To learn more about surplus, please check: https://brainly.com/question/12110173